Vietnam loses $1 billion a year because of low port fees

• Sep 01, 2020

Pham Quoc Long, deputy chair of the Vietnam Ship Agents and Brokers Association (Visaba), said on Dien Dan Doanh Nghiep that the loading and unloading fees are different in the northern, central and southern regions.

The lowest charges in the country are applied in Zone 1, including Quang Ninh, Hai Phong, Thai Binh and Nam Dinh. Service providers there just collect fees equal to 72 percent of that in Zone 2, including ports from Thanh Hoa, Nghe An to Khanh Hoa, Ninh Thuan and Binh Thuan, and equal to 80 percent of Zone 3, including ports in HCM City and Ba Ria – Vung Tau.

The service fees applied in Vietnam are equal to 30-60 percent of the service fees other countries in the region collect from foreign ships.

“When setting such low service fees, we are losing big money every year,” Long said.

Also according to Long, the import/export container loading and unloading fees at Vietnam’s deep water ports are just equal to 45-80 percent of that at large ports in the region, including Hong Kong, Singapore, Malaysia and China. The fees at Vietnam’s ports are even lower than at the Phnom Penh Port in Cambodia, a port that does not have a high investment.

The problem is that though foreign ships can benefit from the low loading and unloading fees, they charge Vietnamese goods owners high fees.

Long said when foreign ships only pay $33/TEU in service fee at Dinh Vu Port, $52/TEU at Cai Mep and $41/TEU in HCM City, they collect $120/TEU from Vietnamese goods owners, which means that they make big profits.

“If the current floor fees are maintained, with 10 million TEUs of goods a year, foreign ships pocket $1 billion a year from the difference in the fees they have to pay and the fees they collect from goods owners,” Long said.

Port fees in Vietnam are by far lower than regional countries, which causes the country to lose $1 billion a year from revenue sources.

Vietnam needs to raise port service fees to reduce losses.

A representative of the shipping lines’ association affirmed that the increase in container loading and unloading fees will not lead to an increase in logistics costs because the loading and unloading fees are included in the total freight that goods owners paid to ship owners. It is estimated that ship owners pocket $55-80 per container.

The representative also said Vietnam loses $1 billion to foreign shipping firms’ hands, because foreign shipping firms undertake the shipping of 99.9 percent of container exports.

Deputy Minister of Transport Nguyen Van Cong confirmed that the service fees at Vietnam’s ports increased in Circular 54/2018, but there are still big differences between Vietnam and other regional countries, especially Cambodia. Therefore, making further adjustments in service fees to ensure enterprises’ benefits is a necessity.

Kim Chi 

Source: https://vietnamnet.vn/en/business/vietnam-loses-1-billion-a-year-because-of-low-port-fees-667988.html